Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Putin’s Ukraine Strategy Could Lay the Groundwork for War

Politics / Russia Sep 21, 2016 - 06:03 PM GMT

By: John_Mauldin

Politics

BY GEORGE FRIEDMAN : Tensions between Russia and Ukraine are growing. According to the Russians, a special operations team from Ukraine attacked Crimea in August. The Ukrainians denied the claim. The Russians appeared to be moving forces around in Crimea and increasing their number and posture.

There have been reports of Russian troop buildups east of their border with Ukraine. There is also an unconfirmed report of Russian troops deploying in pro-Russian, rebel-held territory inside Ukraine. The Russians have done nothing to tamp down tensions.


Whatever the truth, the Russians are establishing a justification for taking action against Ukraine. I have predicted that the Russians will eventually move to change the situation in Ukraine, militarily if necessary.

Ukraine is too key to them strategically to accept anything less than a neutral government in Kiev. Therefore, I expect the Russians to take some notable action.

My view is that the military option is likely off the table. Ukraine is a large country. To occupy it against minimal resistance would require a force that Russia didn’t have a year ago. Thus, I think the informal truce will hold to at least the end of 2016.

So, an increased tension will likely lead nowhere. But the Russians are talking war, and we must consider why.

Russia’s Need to Show Strength

The Russian economy has declined sharply. This hurts President Vladimir Putin’s political position, especially among senior officials and oligarchs who make up the Russian elite. Putin has been increasing his power lately, replacing some governors with his former bodyguards. But actions like that don’t make him appear powerful. They make him seem worried.

The other force that is undermining Putin’s position is his mishandling of Ukraine. While Westerners think of Putin as the aggressor, at the end of the day, Ukraine’s Russian-friendly government was replaced by a pro-Western government.

All the Russians retained were Crimea (where they already had a massive force) and a presence in eastern Ukraine. There, the Russians tried to incite a broad uprising that never happened.

Putin needs to do something significant since he hasn’t been able to do much about the economy or Ukraine. He needs to appear threatening, even if it’s a bluff.

Given recent regional shifts and improved relations with Turkey, Russia has some advantage. It is not clear, though, whether the Russian military would take action that might lead to confrontation with the US.

If Russia were to get bogged down or lose, it would be Putin’s end. It would also end Putin’s attempt to separate Europe from the US. This type of Hail Mary doesn’t seem worth it.

Putin’s Strategy

So what is Putin doing?

If Putin wanted a suitable political settlement, this would be the best strategy. He should create a crisis that makes it appear Russia is on the verge of attacking Ukraine. This would lead countries to send dignitaries to the region in an effort to convince the Russians not to go to war.

Putin would make absurd demands, enraged by the aggression of the Ukrainians. Then as talks appear to be collapsing, he would come to a deal. Given the American sense of weakness after Ukraine, and Germany’s distraction, it would be the ideal time for this move.

But, the Russians could also use the same strategy if they made a decision to go to war.

The Russians would create a massive crisis and then reach a reasonable agreement. They would stand down—except for a few divisions that carry out exercises—and everyone would relax. Then, the Russians would strike.

This is what the Soviets did in Hungary and Czechoslovakia and what Russia did in Georgia. And they blame the attack on some action by the target—a target that thinks the Russians have backed down.

Here’s the problem. If the Russians wanted a negotiated settlement or if they were getting ready for war, they would act in exactly the same way. The negotiation requires an opening bluff. A war requires a final bluff.

So, as much as I think this is not going to end up in a war right now, we can’t ignore that this looks like the early stages of one.

A Poor Economy Won’t Stop the Russians

Some believe that a weak economy precludes war. Generally, I believe that isn’t true, but with the Russians, it certainly isn’t true. The Russians have fought all their wars from Napoleon on with an economy in shambles. It is their normal condition.

Keep in mind, this would be a local conflict, not a world war. The US might be involved but not on a large scale. As for sanctions, they really aren’t a deterrent on a national security issue. Sanctions are rarely placed on a country that has just won a major war and is now perched on the borders of Europe. And that’s one of the attractions. In that position, Russian can try to extract economic benefits.

I would not have been surprised to see this happen in a year. I am surprised to see it now. But while we know what we are seeing, we don’t know what it means. The next thing to watch is whether the Russians increase their rhetoric. If they do, things could get very scary indeed.

Watch George Friedman's Ground-Breaking Documentary Crisis & Chaos: Are We Moving Toward World War III?

Russian posturing is part of a storm of instability engulfing a region that’s home to 5 billion of the planet’s 7 billion people.

In this provocative documentary from Mauldin Economics and Geopolitical Futures, George Friedman uncovers the crises convulsing Europe, the Middle East, and Asia… and reveals the geopolitical chess moves that could trigger global conflict. Register for the online premiere now.

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in